Bonds, Currencies & Commodities
FII limit for purchase of G-secs to be raised soon: Finance ministry

A finance ministry official said that the FIIs have almost exhausted the Rs43,650 crore ($10 billion) investment limit for purchase of G-secs and they would not be able to buy more securities unless the ceiling is enhanced

New Delhi: The government is likely to soon increase the purchase limit of government securities (G-secs) by the foreign institutional investors (FIIs), a move that will help it meet the enhanced market borrowing target without hurting liquidity position in the system, reports PTI.

The FIIs, a finance ministry official said, has almost exhausted the Rs43,650 crore ($10 billion) investment limit for purchase of G-secs and they would not be able to buy more securities unless the ceiling is enhanced.

As per the latest data, the FIIs’ investment in G-secs were at Rs42,388 crore.

“We could increase the limits for FIIs investment in G-secs soon as we need money,” a finance ministry official said without specifying the proposed limit.

G-secs comprise treasury bills and dated securities issued by the central and state governments.

The government last month revised its market borrowing programme for 2011-12 and decided to raise an additional Rs52,800 crore. Following the revision, the government will raise Rs4.7 lakh crore from the market, up from Rs4.37 lakh crore in the previous fiscal.

There are apprehensions that increased government borrowing would reduce the credit availability for the private sector.

The government had earlier relaxed the norms for FII investment in long term infrastructure bonds.

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Indian economy to grow at 7.5-8% this fiscal: Chief economic advisor

“There is slowdown across the world... our growth rate would be 7.5% to 8% (this fiscal) ...India is one of the slowest slowdown,” chief economic advisor Kaushik Basu said

New Delhi: Amid concerns of a global slowdown, chief economic advisor Kaushik Basu on Monday said the Indian economy is expected to witness a growth rate between 7.5% and 8% this fiscal, reports PTI.

“There is slowdown across the world... our growth rate would be 7.5% to 8% (this fiscal) ...India is one of the slowest slowdown,” he said at ADB-India partnership silver jubilee celebrations here.

In the first quarter of the current fiscal, the Indian economy posted a growth rate of 7.7%.

“We do expect some slowdown in exports in the second half of this year. Foreign direct investment for this year look very, very good,” he said.

Long-run drivers of growth are remarkably good, he said.

Earlier in the day, finance minister Pranab Mukherjee said that in the medium to long-term, India remained firmly on a high gross domestic product (GDP) growth path of 8.5%-9%.

“We, however, need to be alert and respond to emerging challenges and concerns, in a timely manner as we make efforts to achieve our potential as a young fast growing nation,” he said.

Chief economic advisor Kaushik Basu said partly attributed rising inflation to high wages. In India, the biggest inflation in the last one-and-a-half years is taking place in the labour-intensive sector, Mr Basu said.

“This is a sign of rising cost of labour and also we have data now that wages are inflating faster than good and services,” he said.

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Adarsh chief told to approach CBI court to de-freeze bank a/c

According RC Thakur, chief secretary of the controversial Adarsh Housing Society and an accused in the scam, the six bank accounts were personal accounts and have not been used for transactions while purchasing the flats in scam-tainted Adarsh building

Mumbai: Refusing to grant relief, the Bombay High Court on Monday directed RC Thakur, chief secretary of the controversial Adarsh Housing Society and an accused in the scam, to approach the special Central Bureau of Investigation (CBI) court with his application for de-freezing the bank accounts, reports PTI.

Mr Thakur and his family had approached the high court seeking to defreeze their six bank accounts seized by CBI soon after registration of FIR in the scam in January this year.

According to the petitioner, the six bank accounts were personal accounts and have not been used for transactions while purchasing the flats in scam-tainted Adarsh building.

“It is not CBI’s case that money with which flats were purchased were transferred or paid for from these accounts.

These accounts have got nothing to do with the scam investigation,” Mr Thakur’s advocates Girish Kulkarni and Saket Mone argued.

A division bench of justices AM Khanwilkar and PD Kode, however, observed that since Mr Thakur was a government servant, the CBI may be looking into disproportionate assets case.

CBI counsel DN Salvi told the court that there were transactions of Rs11 lakh and Rs6 lakh in the pension account of Mr Thakur.

“We are trying to find out from where this much money was deposited into the pension account. The remaining five accounts are also under scrutiny,” the counsel said.

He further said since the case had been registered before the special CBI court, the accused could approach that court with any application.

The bench then directed Mr Thakur to file the application before the special CBI court and disposed of the petition.

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